Forcing a Property Co-Owner to Sell

Our lives are constantly changing, which in turn changes our plans, our goals, and our commitments. Dissension among heirs can arise when two or more family members (usually siblings or cousins) inherit a piece of real estate, and those life changes affect the new owners’ plans for the property. If there is a dispute about holding or selling the property which the co-owners are not able to resolve among themselves, the court system can offer a remedy.

Let’s say, for example, that Ben, Bruce, and Bobby inherited their parent’s rental property seven years ago. Bruce now needs cash, and wants to turn his interest in the property into cash. Ben and Bobby either can’t or simply won’t buy Bruce out, and they refuse to sell the property. Bruce is now a reluctant co-owner.

Bruce has a legal remedy. He can file what’s called a partition action against Ben and Bobby. In his lawsuit Bruce can ask the court to force a sale of the property and divide the proceeds according to the respective interests in the property. The only requirement to make a request for a partition is to have a legal interest in the property, even if it is only a very small interest. Ben and Bobby will have a chance to buy Bruce’s share out in the court proceeding. If they fail to do so, the property will be sold to a third party at the best price obtainable. The sale proceeds will be split between Bruce, Ben, and Bobby in proportion to their ownership shares.

I previously handled a case in which a four-unit apartment house was purchased in the 1960’s by four couples who had long since died. Their children and grandchildren continued to either live in the property or rent out their predecessor’s unit after the deaths of the original purchasers. There was no coordinated management of the building so repairs and maintenance was haphazard. On the eve of the property’s sale for delinquent taxes, my client stepped forward to try to save it. We had to deal with over 50 relatives, several probates, and lawsuits. It was a long and difficult journey, but the property was eventually sold at an advantageous price. Each heir received his or her proportionate share in cash.

Hopefully families or other co-owners of real estate won’t have to go to court to settle their differences over the handling of inherited property. The situation can get particularly touchy if one of the co-owners is living in the house and must move out when the house is sold. While it is good to know that the partition option exists for those who need to use it, there is no substitute for good estate planning which addresses this issue in advance. © 2013 by Marlene S. Cooper. All rights reserved.